Iapl/75/2022 Of Jubilant Pharmova Limited v. Joint Commissioner Of Income Tax

Case :- INCOME TAX APPEAL No. - 75 of 2022 Appellant :- Jubilant Pharmova LimitedRespondent :- Joint Commissioner Of Income TaxCounsel for Appellant :- Suyash AgarwalCounsel for Respondent :- Gaurav Mahajan Hon'ble Mrs. Sunita Agarwal,J.Hon'ble Vipin Chandra Dixit,J. Heard Sri Divyanshu Agrawal and Sri Suyash Agarwal, learnedAdvocates for the appellant and Sri Gaurav Mahajan, learnedcounsel for the Income Tax Department. In this Income Tax Appeal under Section 260A of the IncomeTax Act, 1961, the substantial questions of law which have beenframed for admission of appeal, are as under:- "a) Whether or not the ITAT was legally correct in holding thatthe corporate guarantee provided by the appellant to banks forproviding loan to its Associated Enterprises without charging any fee or commission, is an international transaction underSection 92B of the Income Tax Act, 1961 when the transactionis of such a nature as to have no bearing on profits, income,losses or assets of enterprise? b) Whether or not the ITAT was legally correct in holding that,the Explanation to Section 92B of the Income Tax Act, 1961inserted in the statute vide Finance Act, 2012, enhancing thescope of an anti-avoidance provision, can be implemented withretrospective effect and made applicable to Assessment Year2011-12? c) Whether or not the ITAT was legally correct in treating thecorporate guarantee provided by appellant on behalf of itsAssociated Enterprises, as an international transaction underSection 92B of the Act disregarding the fact that the provisionof corporate guarantee to the AEs was in the nature ofshareholder activity for which arm's length compensation is notrequired." The Tribunal has noted that the issue relates to deletion ofaddition of Transfer Pricing Adjustment made to Arm's Length Price(ALP) of corporate guarantee provided to the OverseasAssociated Enterprises. While the Transfer Pricing Officer,treating the corporate guarantee as an international transaction,charged guarantee commission at 4.86%. TheCommissioner(Appeals) accepted the assessee's submission andheld that the provision of corporate guarantee in the assessee's own case for the assessment year 2009-10 and 2010-11 came upfor consideration before the Tribunal and while deciding theassessment, the matter has been remitted to the AssessingOfficer for de-novo adjudication after due and reasonableopportunity of hearing to the assessee. The issue referred forreconsideration has been made in the light of the observation ofthe Commissioner(Appeals) and it was noticed that theCommissioner(Appeals) did not deal with them, as he held thatthe provision of corporate guarantee is not an internationaltransaction. The Tribunal, in the current case of 2011-12 of the assessee,having noted the above fact, decided to remit the issue to theAssessing Officer for deciding afresh with similar direction. Asthe substantial questions of law framed herein relates to thesame issue, the Assessing Officer would decide the fate. At this stage, when the matter is before the Assessing Officerfor taking afresh decision, there is no question to entertain thesubstantial questions of law. The appeal is, accordingly dismissed. Order Date :- 26.9.2022P.P.